answersLogoWhite

0

What makes the simple interest simple?

Updated: 4/28/2022
User Avatar

Wiki User

10y ago

Best Answer

It is interest on simply the original capital. After the first period, compound interest involves interest on the interest earned in previous periods and soit not simple.

User Avatar

Wiki User

10y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: What makes the simple interest simple?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

What is the Formula for simple interest rate?

The answer for rate in simple interest is =rate= simple interest\principle*time


What is the calculation for a simple compound interest rate?

There is simple interest and there is compound interest but this question is the first that I have heard of a simple compound interest.


How long does it take to get 40.00 on 8 percent interest with 2.00?

That depends on how the interest works.Is it simple interest ? Is it compound interest ?If compound, then how often is it compounded ?8% simple interest turns $2 into $40 in 237.5 years .8% compound interest, compounded quarterly, does the job in 37.8 years .As you can see, it makes quite a difference.


Marl borrowed 200 at 12 percent simple interest for on year If he makes no payments that year. How much interest will he own at the end of the year?

24.00


Is the annual interest rate the same as simple interest?

Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.Usually no. Most institutions charge (and pay) compound interest, NOT simple interest.


What is the difference of simple interest and simple discount?

Simple interest refers to interest that is only paid on principal. Simple discount refers to the amount that is deducted from the amount of the loan.


Definition of simple interest?

Simple interest is a term that is used for quickly calculating the interest charge on a loan.


what is the formula of simple interest?

The formula for simple interest is: A=P(1+rt)


Difference between simple and compound interest?

Simple interest is based on the original principle of a loan. Simple interest is generally used on short-term loans. Compound interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on.


Disadvantage of simple interest?

Simple interest is calculated on the principal amount only, which may sound like a good idea at first. The problem with simple interest loans is that the interest is calculated daily instead of monthly. This means you will end up paying more in interest with a simple interest loan.


What are the advantages of using simple interest?

Using simple interest is easier for people to understand. Customers will be able to manage their payments if a business uses simple interest.


What are the two kinds of interest?

simple interest and compound interest